When you make an offer on a home in Charleston- or even South Carolina, there are different contingencies that should be apart of any real estate contract. Typical contingencies such as a home-sale, financing, appraisal, and inspection contingencies. So what about due diligence, where does that fit in?
Regarding the home inspection contingency in paragraph 8 of the South Carolina contract, you typically can go one of two ways. Either a Repair Procedure, or a Due Diligence Addendum.
The repair procedure spells out how long you have to complete any home inspections, but it specifically states in the contract which items are to be addressed. Typically, these are major home items/systems such as Heating & Air systems, plumbing, electrical systems, structural integrity of the home, and the roof free of leaks. If any of these areas are in need of repair, then the buyer must deliver, via a repair addendum, a list of items that need to be repaired. This list may be negotiated back and forth between buyer and seller any number of times until all parties come to an agreement. The sellers have until closing to make any/all repairs agreed upon.
Due diligence is a little different (and in my opinion a favorite if I am representing the buyers). Under due diligence, the buyers have any number of specific business days that they see fit (typically 10 business days or less) in order to perform any due diligence on a property. So this not only means any repairs found in the home inspection (like that of the repair procedure above), but also any questions that need to be answered regarding the property prior to moving forward. Questions like, what are the annual taxes? What is the homeowners annual hazard insurance (this could be especially high if they are in the windpool). Questions about dock permits if the property is on water. Flood insurance costs, etc. Any questions that need to be answered prior to buyers agreeing to move forward.
So a popular question is- "Can the buyers back out for any reason under a due diligence contingency?" Well, I'm no attorney but under due diligence the buyers should be able to walk until that due diligence date is met. They DO need to notify the sellers in writing that they are not moving forward, though. Because if they do NOT notify the sellers in writing, then they are accepting the property in "as-is" condition if they DO NOT have a SIGNED, executed/ratified repair addendum by that date.
I hope this helps differentiate between the two types of repair procedures currently in South Carolina. Like I said, if I am representing the buyer- I like to use a due diligence addendum. But if I'm representing the seller, I like to see a repair procedure contingency. Neither one is the absolute "best".
And always remember- it all boils down to this. Does the buyer want to buy and does the seller want to sell? Because no matter how convoluted things can get, it all comes down to that!Posted by Mike Ciucci on
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